RI'S SECOND-HALF GROWTH MAY REACH 4.6 PCT: MINISTER

Jakarta, July 10 (ANTARA) - The Indonesian economy may grow 4.6 percent in the second half of 2009 on increased government spending and current positive economic sentiments, Finance Minister Sri Mulyani Indrawati said.

"In the second half among the sources that will have the potential to accelerate the growth will be budget spending. The second will be positive sentiments to the result of the just-concluded presidential poll that we hope will create certainty," she said following a limited cabinet meeting at the Presidential Office here on Thursday.

Given controllable macro stability and better-than-expected global condition, the second-half economic growth might reach above 4.5 percent, exceeding the first-half growth forecast of 4.1 percent, she said.
"If we look at the current condition the economy will expand 4.5 percent or even 4.6 percent. The first-half growth is estimated to reach 4.1 percent. That is why if we want 4.5 percent growth (in 2009) the second-half growth must be close to 5 percent," she said.

She said funds used to finance activities aimed at speeding up the economic stimulus program could be disbursed as early as in August 2009.

President Susilo Bambang Yudhoyono said recently he was optimistic that the economy would grow 4-4.5 percent this year owing to the increasingly conducive macro economic condition and political stability.

Earlier, on Wednesday, Sri Mulyani hoped investment would grow seven percent to support the economy so that it could grow four percent this year.

"If growth is still quite strong we hope investment in the second quarter and in the second semester can grow higher than in the first quarter which was recorded at 3.5 percent," she said.

She said investment growth was expected to come from foreign direct investment, bank credits, expenditures of state-owned and private companies and also from the capital market.

Data from the Finance Ministry show investment is predicted to grow 5.6 percent and the economy 4.1 percent in the first half of 2009.

Meanwhile, the economy is predicted to grow 4.6 percent in the second semester, supported by investment which is expected to grow 9.2 percent.

In 2009 the country's economy is expected to grow 4.3 percent, supported by an investment growth of 7.4 percent.

Foreign direct investment in the first semester this year meanwhile is predicted to reach US$4.549 billion or up from the same period last year reaching US$3.5 billion.

For the second semester it is predicted to reach US$1.704 billion, down from US$4.419 billion recorded in the same period last year.

Foreign portfolio investment in the first semester this year is predicted to be minus US$1.178 billion, down from minus US$288 million in the same period last year.

Foreign portfolio investment in the second semester of 2009 is predicted to reach US$420 million, up from a minus US$1.309 billion in the same period last year.